Alabama ranked No. 2 for overall small business friendliness in the 2013 survey, trailing only Utah. Alabama’s rank improved from No. 10 among the states in a 2012 survey. In the new survey, Alabama ranked No. 1 in the ease of hiring of a new employee and placed in the top 10 in all 11 survey categories.

Additionally, Alabama was among the top states for anticipated hiring activity by small businesses in 2013, according to Thumbtack.com, an online service that connects employers with available workers.

“Alabama has numerous programs in place that help reduce the red tape that can often accompany starting a small business,” said Eddie Postell, manager of the small business division at the Alabama Department of Commerce. “We are excited that the state rose in rankings from number ten last year to number two this year and that we also ranked number one in ease of hiring employees. We will continue to work with our small business community and hope to expand these services so that small businesses always thrive in Alabama.”

The 2013 Thumbtack.com survey draws upon data from more than 7,000 U.S. small businesses. Rounding out the top 5 states in the analysis were New Hampshire at No. 3, Idaho at No. 4 and Texas at No. 5.

Thumbtack.com says long-term economic growth in the United States is built on the success of new enterprises, underscoring the crucial role played by small businesses.

“Over 99% of U.S. employer firms qualify as small businesses, and they employ half of all private sector employees,” it says in the study. “Over the past two decades, almost two-thirds of net new private sector jobs have come from small businesses, and that number has accelerated in recent years.”

The Kauffman Foundation is a non-profit organization that studies entrepreneurship.